Netflix Inc (NFLX, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its strong financial performance and promising growth prospects. With its shares currently priced at $668.23, Netflix Inc has experienced a daily gain of 2.29% and a notable three-month change of 9.65%. A detailed analysis, supported by the GF Score, positions Netflix Inc as a prime candidate for significant future growth.
What Is the GF Score?
The GF Score is a proprietary ranking system developed by GuruFocus, assessing stocks based on five key aspects of valuation. These aspects have shown a strong correlation with long-term stock performance from 2006 to 2021. Stocks with higher GF Scores typically yield higher returns. The GF Score ranges from 0 to 100, with 100 indicating the highest potential for outperformance. Netflix Inc boasts a GF Score of 93, signaling strong future performance potential.
- Financial strength rank: 7/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 3/10
- Momentum rank: 9/10
Understanding Netflix Inc's Business Model
Netflix Inc, with a market cap of $287.94 billion and annual sales of $34.93 billion, operates a streamlined business model focused on its streaming service. It is the largest provider of television entertainment globally, boasting nearly 250 million subscribers. The company has recently ventured into ad-supported subscription plans, diversifying its revenue streams beyond traditional subscription fees.
Financial Strength of Netflix Inc
Netflix Inc's financial robustness is evident in its Interest Coverage ratio of 10.53, significantly above the benchmark set by investing legend Benjamin Graham. An Altman Z-Score of 8.14 further underscores its financial stability, while a Debt-to-Revenue ratio of 0.4 highlights prudent debt management.
Profitability and Growth Metrics
Netflix Inc's Operating Margin has impressively increased over the past five years, demonstrating its growing efficiency in revenue conversion. The company's consistent improvement in Gross Margin further reflects its operational prowess. With a Piotroski F-Score confirming strong financial health and a Predictability Rank of 4.5 stars, Netflix Inc is well-positioned for sustained growth.
Conclusion: Netflix Inc's Market Position and Future Outlook
Considering Netflix Inc's robust financial strength, high profitability, and consistent growth metrics, the GF Score highlights the company's exceptional potential for market outperformance. Investors looking for strong, stable, and growing companies would find Netflix Inc an attractive option.
For more insights into companies with strong GF Scores, visit our GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
